The Palestinian National Authority (PNA) and Japan signed on Monday an agreement, where Japan would donate 32.5 million U.S. dollars for a project of treating waste water in the West Bank town of Jericho.

Palestinian Prime Minister Salam Fayyad and the diplomatic representative of Japan in the Palestinian territories signed the agreement, according to the Palestinian state-run Wafa news agency.

The project of treating the waste water in Jericho, according to Fayyad, is considered as one of the biggest projects aided by Japan in the Palestinian territories. The project will supply industrial areas with water.

"The agreement is so vital, strategic and important to help the PNA finalize building the institutions of the future Palestinian state," Fayyad said after he signed the agreement.

He noted that since 1993 Japan had aided the PNA with more than 1 billion dollars, including 40 million dollars in developing the Jordan Valley area in the West Bank.

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